Audit Notes: newspaper war, inflation fears, executive pay

The Times-Picayune says it planned to go into Baton Rouge all along

The Times-Picayuneplans to move into Baton Rouge to hit back at the Advocate’s move into New Orleans.

But publisher Ricky Mathews says that move was planned all along, well before the Baton Rouge Advocate announced it would print a daily newspaper in New Orleans to compete with the soon-to-be three days a week Times-Pic. The blog Dump the Picayune makes this catch, from the print version of the paper:

Though the announcement follows one by The Advocate that the Baton Rouge paper plans to open a New Orleans office and provide home delivery in the city, [publisher Ricky] Mathews said NOLA Media Group’s move was not prompted by The Advocate entering the local market.

“Absolutely not. This has been part of the plan from day one,” Mathews said.

“To be honest, we’ve been negotiating for an office there for months. The plan has been to bridge these two cities.”

Right.

— The Financial Times’s Izabella Kaminska pulls some clips from the archives of The New York Times to show how inflation fears of today resemble those of the Depression era of the 1930s:

Did you know, for example, that people were just as worried about debasement-induced inflation and money printing in the 1930s as they are today? That’s despite the US Great Depression ending up as one of history’s best examples of a prolonged deflationary period.

A search for ‘inflation’ from January 1929 to December 1933, meanwhile, yields up to three times as many results as a search for ‘deflation’ (5,109 to deflation’s 1,957).

You have to wonder what they’ll think in 2092 when they look back on the subprime and euro crises.

— The NYT’s Gretchen Morgenson looks at new research that suggests a critical component of executive pay is based on bogus assumptions:

Importantly, the study disputes the notion that executive pay today is a result of an efficient bidding process for finding and retaining a scarce and valuable commodity: managerial talent. “In essence, this process creates a model of a competitive market for executives where it otherwise does not exist,” the authors wrote. “Through the operation of a market, it is argued, wages are bid up to an executive’s outside opportunities.”

But there is little evidence, according to Mr. Elson and Mr. Ferrere, that a hot market exists for interchangeable chief executives. First, they note numerous academic studies indicating that C.E.O.’s selected from within a company perform better than outsiders, especially in the creation of long-term shareholder value.

“There is no conclusive empirical evidence that outside succession leads to more favorable corporate performance, or even that good performance at one company can accurately predict success at another,” the authors conclude. “In short, executive skills cannot pass the most basic test of generality: transferability.”

These folks aren’t as singular as they—very often with the help of the press—like to portray themselves.

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